Israel’s Xsight Labs Raises More Than $300 Million at a $2.8 Billion Valuation

Israeli semiconductor company Xsight Labs has closed a funding round of more than $300 million, establishing a post-money valuation of $2.8 billion. The round was led by Fidelity Management & Research Company, with participation from new and existing investors including Intel Capital, Battery Ventures, T. Rowe Price, Valor Equity Partners, Atreides Management and Key1 Capital.

Xsight Labs develops intelligent connectivity silicon for AI data centers, hyperscale cloud infrastructure, edge networks and telecommunications systems. The company said the new funding follows growing commercial traction for its two main products, the E1 Data Processing Unit and the X2 programmable Ethernet switch, which have been selected by several global network operators and are being evaluated by Tier-1 hyperscalers and equipment manufacturers.

The E1 is an 800G DPU designed to process network traffic at full line rate. According to Xsight Labs, the processor sustained more than 14 million connections per second in industry-standard testing, while supporting hardware-accelerated AES-GCM and AES-XTS encryption without reducing throughput.

The device integrates 64 Arm Neoverse N2 cores directly into the data path, allowing routing, telemetry and packet inspection to be performed on every packet. This architecture is intended to eliminate the slower exception-processing path commonly used by conventional network processors.

E1 operates in a standard Linux environment and supports DPDK and SONiC, allowing engineering teams to deploy existing software stacks without relying on a proprietary software development kit. The processor operates at less than 75 watts and, according to the company, delivers four times the performance per watt of previous-generation designs.

Xsight Labs’ X2 is a fully programmable Ethernet switch delivering 12.8 terabits per second of switching capacity. Its XISA instruction-set architecture allows operators to reprogram the data plane after deployment and introduce new protocols and features through software rather than waiting for a new generation of silicon. The device operates at less than 200 watts and provides deterministic latency of under 700 nanoseconds.

One of the most significant deployments of X2 is linked to SpaceX. According to Globes, the processor was successfully tested in the company’s new V3 satellites and is expected to support the terabit-scale routing requirements of the next generation of the Starlink network. The switch’s programmability is particularly valuable in space systems, where operators need to update or modify functionality remotely after launch.

Xsight Labs plans to use the new capital to accelerate its multi-generation switch and DPU roadmap, including support for emerging Ultra Ethernet Consortium standards. The company will also expand its engineering and customer-support teams in Israel, the United States, Europe and Asia, while scaling manufacturing, supply-chain operations and delivery capacity for high-volume Tier-1 customer programs.

Founded in 2017, Xsight Labs is a fabless semiconductor company headquartered in Tel Aviv, with additional Israeli operations in Kiryat Gat and Haifa. It also maintains offices in the United States and Armenia. Semiconductor entrepreneur Avigdor Willenz was among the company’s earliest investors and serves as chairman.

The funding reflects the growing strategic importance of data-center connectivity. As AI systems incorporate larger numbers of accelerators, memory devices and compute nodes, network bandwidth, latency and power consumption are becoming critical constraints. Xsight Labs is positioning its programmable and open networking architecture as an alternative to closed, proprietary infrastructure platforms.

Credit: Xsight Labs.